VW offers $A20bn settlement to US owners, but Aussies miss out

By Barry Park, 29 Jun 2016Industry

US emissions cheat fix offers to buy back some owners’ cars, and compensate others with cash

VOLKSWAGEN Group has agreed to buy back cars and pay owners up to $A13,000 in compensation in the US as Australian buyers are asked to take time out of their day to queue up and have their vehicles fixed.

The German carmaker this week said it would spend the equivalent of $A20 billion in the US either fixing up to 500,000 Audi, Skoda and Volkswagen-badged 2.0-litre diesel-engined cars that US regulators say cheated on diesel emissions, or allowing owners to hand them back to the company.

However, the cost to the company could soar even higher, with no deal struck between VW and the US government on how it will settle with owners of the 3.0-litre V6 engine used in Audi, Porsche and Volkswagen-badged cars that was also identified as producing significantly more harmful emissions than tests claimed.

“The striking differences between US and Australian regulations have gone largely unreported,” Volkswagen Australia managing director Michael Bartsch said in a statement.

“US regulations are unique in the world in that they are very significantly lower than European standards in terms of NOx [atmospheric pollutant] levels.

“Euro, and hence Australian, standards are built around lowering environmentally harmful carbon emissions and fuel consumption,” he said.

About 8000 Volkswagen Amarok trade utes fitted with a 2.0-litre diesel engine are the only Australian vehicles to so far issue a recall to fix the socalled emissions defeat device.

Only about 2400 owners have applied the fix, which takes about half an hour to update the software used to manage how the engine runs – recalls usually have a long tail as owners wait until a regular service interval rolls around before taking their vehicle back to the dealership.

Other vehicles, which are yet to have their recall program approved by the Australian government and also extend to 1.6-litre and 3.0-litre diesels, may need what the carmaker calls a “hardware upgrade”.

In a statement released this mornining, Volkswagen Australia said the local situation "mirrored that of Europe, where similar regulations also prevail" rather than the US.

“There is no compensation for European customers,” Mr Bartsch said. “The relevant facts and complex legal issues that have played a role in coming to these agreements in the United States are materially different from those in Europe and Australia.

“Volkswagen is committed to resolving the diesel matter for all affected customers around the world quickly and efficiently. We recognise the need to regain their trust and we are doing everything possible to achieve this.”

However, similar to the US, Volkswagen Australia is facing a Federal Court class action brought against it by angry Australian customers seeking a settlement with the company. Volkswagen is defending the claim.

Volkswagen Australia says no petrol engines sold here have been scooped up in the scandal, despite concerns overseas that some have used similar emissions testing cheats to post lower numbers.